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New Jersey Dep't of Environmental Protection v. Singh

December 14, 2007


On appeal from the Commissioner, Department of Environmental Protection, Docket No. EWR-2913-05.

Per curiam.


Submitted November 26, 2007

Before Judges Parrillo and Sabatino.

In this environmental enforcement action, appellant Cahattarpal Singh, d/b/a KXI Runnemede XTRA (Singh), appeals from a final decision of the New Jersey Department of Environmental Protection (DEP) assessing Singh a civil administrative penalty of $15,000 for violating provisions of the Underground Storage of Hazardous Substances Act (USHSA), N.J.S.A. 58:10A-21 to -37, and regulations promulgated thereunder, N.J.A.C. 7:14B-4.1(a)(3)(ii), by maintaining inoperable UST (underground storage tank) overfill devices. Appellant contends that its violation is "minor" and therefore falls within the Grace Period Law, N.J.S.A. 13:1D-125 to -133, but that even if not so exempted, the penalty should be substantially reduced in light of mitigating factors ignored by DEP. We disagree with both contentions, and affirm.

The facts are undisputed. Appellant operates a gas station in Runnemede, which contains two 4,000-gallon and one 6,000-gallon USTs. On December 16, 2004, a DEP inspection revealed that two tank gauge sticks broken at both ends had been inserted into the fill ports of two of the tanks, preventing overfill devices from functioning properly. The overfill devices are intended to avert filling to 100% of capacity to avoid spillage, and the two broken gauge sticks discovered in the fill ports in this case prevented the flapper valves from closing when the tanks were filled to 95% capacity.*fn1

Appellant insists the fuel deliverer installed these sticks without his knowledge and that he immediately removed them upon DEP's discovery. According to DEP, the disabling of overflow prevention valves is a common practice whereby the transporter benefits from having to make fewer delivery trips, and the station operator benefits from a full fuel tank and a quantity discount.

In any event, as a further result of the DEP inspection, "contaminated soil and a suspected release had been observed in the tank field[;] . . . gauging sticks had been found in drop tubes T1 and T3; . . . the overfill device had been disabled; and . . . a contaminated soil pile had been found in the rear of the station." Consequently, DEP assessed a civil penalty of $15,000 against appellant, representing the midpoint of both the "seriousness" and "conduct" ranges of the applicable penalty matrix, found at N.J.A.C. 7:14-8.5(f).

Appellant contested the assessment and consequently the matter was transferred to the Office of Administrative Law (OAL). Following a plenary hearing, the Administrative Law Judge (ALJ) determined that appellant violated N.J.A.C. 7:14B-4.1(a)(3)(ii), and the violation was not "minor" within the Grace Period Law, N.J.S.A. 13:1D-129(b)(1)-(6). Recognizing that appellant "assert[ed] without contradiction that the fuel truck driver disarmed the safety devices," the ALJ noted that USHSA is a strict liability statute*fn2 that was enacted to prevent the very situation as had occurred here:

"filling tanks to maximum capacity saves time and money for the distributor and [the gas station] operator," and thus the law was meant to encourage operators such as appellant "to be observant when accepting deliveries."

While finding the violation not "minor," the ALJ disagreed with the quantum of the DEP's penalty assessment. In this regard, the ALJ noted that this was a first offense, that [appellant] had no prior knowledge of the transporter['s] intentions, and that there ha[d] been no recurrence in the last year and one half. [Appellant] therefore satisfies a number of mitigating considerations contemplated by the regulation[,] and found that although the penalty for this violation was at the midpoint for violations of moderate seriousness and conduct, the midpoint may be high. Most of the regulatory criteria weighing mitigation and aggravation tend to favor [the DEP].

Deterrence seems to be the major factor in support of the [DEP's] position. Thus, some movement down from the midpoint seems appropriate.

The ALJ reduced the penalty to $12,000.

Following exceptions filed by the parties, the DEP's Commissioner adopted the ALJ's Initial Decision with regard to liability and the inapplicability of the Grace Period Law, but rejected the reduction in penalty because [t]he Initial Decision . . . fails to . . . support . . . a reduction of the penalty assessment in light of the . . . . mitigating and aggravating factors . . . set forth [in] N.J.A.C. 7:14-8.5(i). Although the Initial Decision asserts that a review of these factors weighs in favor of [appellant], that conclusion is not fully supported by the record. Of the seven specific factors listed in N.J.A.C. 7:14-8.5(i), only one weighs in favor of lowering the penalty amount. . . . It was [appellant's] first offense . . . . Others seem to weigh against [appellant]. In particular, . . . the number, frequency and severity of the violation. Here, two of the three USTs had sticks placed in the overfill gauges, and the violations were continuous and ongoing. Further, although [appellant] did remove the broken sticks . . . . [he] did not fulfill all of the remedial requirements ordered by DEP, including the removal and testing of contaminated soil. On these facts, removal of the sticks alone is insufficient for N.J.A.C. 7:14-8.5(i)(3) or (5) to serve as a mitigating factor. Finally, the Initial Decision notes that the deterrent effect of the penalty requires some movement down from the midpoint.

N.J.A.C. 7:14-8.5(i)(4). The Initial Decision does not, however, provide any explanation or factual ...

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